1. Control distribution of assets – You wouldn’t hand over your car keys to a child who has not had proper preparation driving, and chances are you would not want to hand over all your assets to a teenager either. But if both parents die at the same time, or while their children are still minors, the children would inherit all the assets upon their 18th birthdays. A trust allows you to specify how and when you want your children to inherit.
2. Protect assets from creditors – Placing an inheritance in a trust ensures that those assets are protected from your heir’s, or their spouse’s, creditors. A properly drafted trust can protect all your assets throughout your beneficiary’s lifetime from divorce, liability, lawsuits, and other judgments.
3. Protect inheritance from spendthrift heirs – Not everyone is good with money. If your heirs fall into that category, you can use a trust to ensure the assets are not frittered away due to spendthrift behavior.
4. Provide for children of prior marriage or relationship – You can use a trust to both provide for your current spouse and any children from a previous relationship. By doing so, you can prevent pain, confusion, and arguing, which may exist in blended family situations.
5. Provide for a special needs heir – Leaving assets outright to an heir with special needs could disqualify them from receiving important government benefits. Leaving those assets in trust bypasses this potential risk.
6. Avoid probate – Assets can pass to heirs without going through probate by using a trust, saving beneficiaries the time and expense of the probate process. Probate is an expensive, public, and unnecessary court process you can keep your family from having to deal with.
7. Protect privacy – Once a will is entered into probate, it becomes public record, and anyone may access information on what someone inherited. A trust, on the other hand, is a private document that protects your family’s privacy.
If you need to arrange a consultation with an estate planning attorney, contact Adkins Law or call (704) 274-5677.